Nikkei reaches one-week high on raised hopes for U.S. recovery

* Nikkei may stay strong until mid next week-analyst
* Weak yen boosts exporters, with Honda up 3.3 pct
* Sharp almost doubles net loss forecast, stock falls
* Sony up after small Q2 profit, keeps annual guidance
By Ayai Tomisawa
TOKYO, Nov 2 Japan's Nikkei share average
climbed to a one-week high Friday as global cyclical shares such
as carmakers rose on improved U.S. economic data.
The Nikkei rose 1.2 percent to 9,051.22, ending
above the 9,000 mark for the first time in a week. The index
gained 1.3 percent for the week.
Improved U.S. consumer confidence and private-sector jobs
data lifted sentiment ahead of U.S. non-farm payroll figures due
later on Friday. The news lifted the dollar against the yen
, which was quoted at 80.25 yen to the dollar, boosting
the appeal of Japanese exporters.
Honda Motor Co climbed 3.3 percent to 2,467 yen and
Nissan Motor Co gained 2.1 percent.
The broader Topix index also added 1.2 percent on
Friday, to 752.09.
Analysts say that exporters may stay strong until the middle
of next week, helped by the weaker yen.
"The Nikkei may stay above the 9,000 mark until Tuesday's
U.S. presidential election," said Hikaru Sato, a senior
technical analyst at Daiwa Securities, adding that investors
"wouldn't want to change their positions drastically until the
big event is over."
He said that investors may stay slightly positive, but
after the election, they will look carefully at what the next
leader can do to improve the labor market.
Data from payroll processor ADP showed U.S. companies added
158,000 jobs in October - the fastest pace in eight months - and
U.S. consumer confidence jumped last month to its highest in
more than four years.
Economists surveyed by Reuters forecast 125,000 jobs were
created in the United States last month compared with 114,000
jobs created in September, while the unemployment rate is seen
at 7.9 percent versus 7.8 percent in September.
WEAK QUARTERLY EARNINGS
Quarterly company earnings have been weak so far amid
spluttering global growth, with 59 percent of the 90 Nikkei
companies that have reported results undershooting market
expectations, data from Thomson Reuters StarMine showed. That
compared with 54 percent in the previous quarter.
Struggling TV maker Sharp Corp. fell 2.4 percent to
165 yen after warning it might not be able to survive. The
company, whose stock had Friday's highest volume, almost doubled
its full-year net loss forecast to $5.6 billion.
Goldman Sachs, in a note that kept a "sell" rating, said
that even if Sharp can improve its free cash flow and keep
getting bank support, the shares "are overvalued given profit
dilution from a potential capital raise."
Panasonic Corp, another consumer electronics
maker, dropped 0.7 percent, extending the previous session's
19.5 percent slide after it forecast a $9.6 billion net loss for
the business year, nearly matching last year's record net loss.
The stock had Friday's highest turnover.
Sony Corp eked out a small quarterly operating
profit, helped by the sale of a non-core chemicals business. It
kept its forecast for a full-year operating profit of 130
billion yen, sending its shares up 2.1 percent to 934 yen.
Among many companies which cut their annual earnings
guidance were Nikon Corp and printed circuit boards
maker Ibiden Co Ltd. Nikon lost 6.1 percent to 1,928
yen and Ibiden sank 8.6 percent to a nine-year low.
The benchmark Nikkei is up 7.0 percent this year, trailing a
13.5 percent rise in the U.S. S&P 500 and an 11.9 percent
gain in the pan-European STOXX Europe 600 index.
Still, Japanese equities are more expensive than their
European peers, with a 12-month forward price-to-earnings ratio
of 11.6 versus STOXX Europe 600's 10.9, according to Datastream.
The S&P 500 carries a 12-month forward P/E of 12.6.
Volume on Friday was 1.88 billion shares, above Thursday's
1.85 billion and 17 percent higher than the daily average over
the past 90 days.

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